Early Draft of Township Budget Includes Slight Tax Hike

An early draft of the budget prepared by the township financial officer calls for a modest tax increase, trimmed down slightly by dropping a half million dollars of revenue into the budget from the sale of one liquor license.

The budget presented by financial officer Tom Merchel Thursday night includes a 1.8 cent increase to the current tax rate, which would translate to an increase of $95.36 on a home assessed at the township average of $529,800.

Due to a dip in other revenue—including a reduction in the township’s surplus—Merchel plugged $500,000 from the anticipated sale of a liquor license into the budget. Mall owner PREIT (Pennsylvania Real Estate Investment Trust) has vowed to purchase four licenses at $1 million a piece, even though the township has yet to make licenses available or set the minimum bid price.

“The taxpayers voted for that last year. I think they would want to see that money being used to offset taxes as soon as possible,” said Merchel, who noted the tax increase without the liquor license revenue would have been $58 higher.

But some council members had reservations about inserting revenue into the budget they didn’t already have in hand, and weren’t guaranteed to get in time to adopt the budget.

“I don’t want to count my chickens before they’re hatched,” said Councilwoman Stacey Jordan.

She also expressed concern over the potential for a lawsuit from the owners of East Gate Square shopping center, who earlier this week protested—via their attorney—the mall’s seeming “monopoly” on liquor licenses.

Mayor John Button however said, despite East Gate’s objections, he remains “at this point pretty comfortable that we can move forward” and indicated the township could be ready to bid the first license/s by mid- to late March.

Deputy Mayor Greg Gallo, who has previously voiced his opinion on how the township could use the license revenue most responsibly, said he wasn’t entirely comfortable “plugging an operational expense with a one-time cash infusion,” versus devising a more permanent expense-cutting solution.

“We’re just kicking the can down the road,” he said.

Township manager Scott Carew, briefly looking ahead to future budgets, said the liquor license revenue is simply “part of a larger, tremendous thing that is happening, which is a lot of economic development.”

“We will be generating more revenue through economic development,” he said, pointing to not just the mall expansion, but the Virtua complex on Centerton Road and expansion at Lockheed Martin as further examples. “It could really last out a generation.”

If the township does not receive the money from the sale of a license prior to adopting the budget, it cannot include that money as anticipated revenue in the budget, Merchel pointed out. But while the official deadline for adoption is March 15, he said there is “no real drop-dead date for budget adoption.”

A couple more highlights from council’s budget workshop:

• Five percent of the revenue in the budget comes from the township’s surplus, down from 10 percent last year and 20 to 25 percent a few years ago.
• Carew said the township will save approximately $250,000 this year from state pension reform. Savings from health care reform won’t be fully realized until a new contract is negotiated with township employees.

Council will hold another budget workshop at 6 p.m. next Thursday, in the media center at William Allen Middle School.